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Thursday, 21 February 2002
Page: 687

Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:18 AM) —I move:

Excise Tariff Proposal No. 1 (2002)

The tariff proposal which I have just tabled contains alterations to the Excise Tariff Act 1921.

Excise Tariff Proposal No. 1 (2002) formally places before parliament proposed changes to the duty provisions for excisable blended petroleum products that will allow the water component of emulsified diesel-water fuel blends produced by manufacturers licensed under the Excise Act 1901 to be free of excise duty.

These changes have previously been gazetted to commence on 25 October 2001, and are now being tabled in the House in accordance with section 160B of the Excise Act 1901.

Around the world, new fuels and technologies are being developed, trialled and commercialised in response to environmental concerns. There is evidence to suggest that one such fuel, a blend of automotive diesel fuel and water, emulsified using a small percentage of proprietary additives, offers a cost-effective way to reduce harmful emissions from heavy-duty engines without expensive modification to vehicles.

Several companies are seeking to promote these technologies in Australia. The difficulty these companies face is that, under existing legislation that took effect in 1994, excise applies to the totality of the blended fuel, including the water component.

The government accepts the arguments put by proponents that the water provides no energy in the emulsified diesel blend and accordingly does not consider this proposal will result in any significant loss of excise revenue.

A summary of the alterations contained in this proposal has been prepared and is being circulated.

I commend the proposal to the House.

Debate (on motion by Mr Zahra) adjourned.